LG Chem is planning to triple its battery cathode production in South Korea, TheElec has learned.
The company’s advanced material business is aiming to increase cathode production in the country to 130,000 metric tonnes per year
LG Chem’s current production capacity stands at 40,000 metric tonnes per year.
Its plant at Iksan has a capacity of 5,000 metric tonnes. Its three factories at Cheongju combined have a capacity of 35,000 metric tonnes.
A fourth factory that will start partially operating this year will add 30,000 metric tonnes in capacity. The company is planning to start construction of a factory at Gumi near end of this year, while a second one is also planned at the city later. The two combined will add another 60,000 metric tonnes.
LG Chem acquired the cathode business of GS EM in October, 2016. It has been vertically integrating materials used in battery since then. It also secured the technology needed to produce precursors needed for cathode. It also procured precursors from Umicore, Nichia, Posco Chemical and L&F when needed.
Cathode accounts for 40% of battery costs. It is difficult to secure margins in battery sales if the company is outsourcing them. Prices of nickel, cobalt and lithium fluctuates widely, making it difficult to cut costs there. The more the company produces cathode on its own, it becomes easier to mitigate these risks.
For this reason, LG Chem also constructed a cathode factory at China together with Huayou Cobalt. The factory’s current capacity is 45,000 metric tonnes, while the whole project is aiming for a capacity of 100,000 metric tonnes.
After 2024, LG Chem will secure a production capacity of 230,000 metric tonnes globally. It is aiming to secure up to 50% of the total cathode it uses on its own.
Last year, its battery making subsidiary LG Energy Solution used close to 300,000 metric tonnes of cathode.
LG Chem has also set a roadmap to secure more precursors and nickel sulfate, a person familiar with the matter said. It has a plan for a strategic partnership to procure more nickel sulfate, they added.